Will Stock Broking Firms Rush To Do IPOs?
With Edelweiss Capital and Religare Enetrprises IPOs being oversold more than 100 times (109 and 160 times, respectively, to be precise), it’s hard to resist the temptation from other broking firms to go in for public listings. Apparently a host of firms like Enam Securities, Anand Rathi Securities, Angel Broking and Anagram Stock Broking, are planning IPOs, according to a report. (I am not sure about Enam since I heard on CNBC the other day Manish Chokani, head of research at Enam, talking of obscene valuations commanded by the broking firms and how they did not want to follow the herd in this game).
The broking firms that are backed by private equity funds will be looking at an IPO since the funds may be interested in cashing out now when the going is good. Sharekhan and SSKI are candidates for listing since PE funds have entered them long ago. Motilal Oswal, backed by Bessemer Venture Capital, had recently gone public. But some of the PE-backed firms like Anagram Stock Broking, Angel Broking and Prabhudas Lilladher are very recent deals, and may like to wait for some more time before they go public.
Indiabulls, India Infoline, Geojit, and JRG Securities had got publicly listed when the stock broking was not so much fashionable. Some of them command high valuations as they have succeeded in scaling up, and diversifying their presence to a host of other sectors like consumer finance, real estate and so on.
11/29/07, 5:33 PM |
…but the one firm which has been fighting its PE investors against an IPO is IL&FS, which is quite peculiar…
12/5/07, 12:43 PM |
Seeing the current boom in capital markets and spectacular listing of Religare IPO, there is a strong probability of other broking firms like the ones mentioned above may come up with their IPOs in near future. Moreover, market conditions are favorable for these companies to enter capital markets at this time as they can benefit due to willingness of investors to pay high premiums for shares of such companies. Edelweiss Capital IPO is also one of the examples to prove this as it was oversubscribed by over 100 times.
The allotment for Edelweiss Capital is already out on: http://www.appuonline.com/ipo/allotment.html
The shares of Edelweiss Capital shall get listed on NSE and BSE within a few days.
12/6/07, 1:37 PM |
Valuation obscenity is more or less the name of the game across sectors these days. Who wouldn’t want to cash in? Funny thought, but I think the one’s that are advertising heavily on business channells would come into the market sooner rather than later (you got all of them mentioned in the article). The other point is, will rising trading volumes more than compensate for falling brokerage margins?